Dear Shareholders,
 
Throughout 2024, BUMI demonstrated progressive and commendable performance. Despite fluctuations in the global and domestic business environments, the Company concluded the year with a positive and impressive overall performance. That impressive feat demonstrated how we fulfilled our commitment to continually grow into a resilient company in all circumstances.
 
Geoeconomic fragmentation, political uncertainty, commodity price volatility, climate change, and tensions over international trade governance all appeared to have a negative impact on global economic growth in 2024. This year’s nearly simultaneous leadership transitions in over 60 countries, including one in Indonesia, shifted the economic landscape. According to the International Monetary Fund’s (IMF) October 2024 World Economic Outlook, global economic growth is expected to be 3.2%.
 
We are grateful that, despite these challenges, Indonesia was able to maintain a positive economic growth rate of 5.03% in 2024. Inflation remained steady at 1.57%, staying within the government’s target range. From the coal industry, national coal production in 2024 showed positive growth with an achievement of 836 million MT, increasing from 770.91 million MT in 2023 and exceeding the government’s target of 710 million MT. A total of 233 million tons have been distributed to the domestic industrial market (DMO) and 48 million tons for domestic coal stocks. Until 2024, Indonesia has exported 555 million tons of coal or equivalent to around 33-35 percent of total world consumption.
 
Meanwhile, the government has issued Government Regulation No. 8 of 2025, which relates to export proceeds in foreign exchange from natural resource business, management, and processing. This 100% Export Proceeds (DHE) policy requires exporters to keep 100% of their foreign exchange earnings from natural resources within the country for a year, beginning March 1, 2025. This regulation applies to several sectors, including mining (excluding oil and gas), with the goal of strengthening the national economy and supporting Rupiah exchange rate stability.
 
THE ROLE OF THE BOARD OF DIRECTORS IN STRATEGY FORMULATION AND THE PROCESSES TO ENSURE EFFECTIVE STRATEGY IMPLEMENTATION
The Board of Directors has the primary role and responsibility of collectively leading, managing, and steering the Company. In this regard, synergistic collaboration and coordination are essential to the Company’s success in dealing with the challenges and dynamics of the business environment. With each Board member’s extensive and complementary experience and expertise, we are able to define the Company’s strategic direction and ensure that those strategies are optimally implemented.
 
To ensure the successful implementation of the established strategies, the Board will base all decisions on BUMI’s vision, mission, values, and corporate culture. These decisions align with shareholder directions and prioritize the Company’s best interests. We conduct in-depth analyses of internal and external factors that may impact Company’s performance, then map resource allocation, develop action plans, and outline necessary steps to support effective strategy execution.
 
COMPANY POLICIES AND STRATEGIES
In 2024, the Company’s policies and strategies were centered on strategic diversification and expansion, improving operational efficiency, advancing coal downstream development, and responding to the 100% Export Proceeds (DHE) policy by increasing domestic demand. In terms of downstream initiatives, the Company is working to develop basic chemical products, which will mark its transition from the coal business. Furthermore, the Company continues to improve the performance of its subsidiaries in order to generate strong and resilient consolidated results.
 
Optimizing productivity, cost efficiency, and operational excellence remained the Company’s strategies in 2024. The Company has also responded to the 100% DHE retention policy by expanding its presence in the domestic market, focusing on local sales, and leveraging attractive time deposit instruments. We also ensured effective cash flow management, allowing the Company to maintain adequate liquidity and accelerate its performance.
 
THE COMPANY’S PERFORMANCE IN 2024
In general, the Company’s coal sales experienced a decline in line with the decrease in selling prices. The Company produced 74.7 million metric tons (MT) of coal in 2024, down approximately 4% compared to 77.8 million MT in 2023. Coal sales also decreased by around 4%, from 78.7 million MT in 2023 to 75.8 million MT in 2024. This decline in coal production also impacted overburden removal, which dropped from 765 million bank cubic meters (Mbcm) to 650 Mbcm. Meanwhile, the stripping ratio declined from 9.8 times in 2023 to 8.7 times in 2024. Despite these declines, the Company successfully fulfilled its obligations related to the Domestic Market Obligation (DMO) as a demonstration of responsibility and compliance with prevailing regulations.
 
As of 2024, the Company had a total coal reserve of 2.4 billion MT, divided between its operational areas: 721 million tons at KPC and 327 million tons at Arutmin. The Company had additional reserves of approximately 1.3 billion MT in Pendopo, South Sumatra. With such a large reserve base, the Company anticipates approximately 30 years of coal production, with an annual production target of 80 million tons. The Company’s current coal resource potential is 6.81 billion metric tons.
 
In 2024, the Company recorded operating revenue of USD 1,359.68 million, a decrease of 19.06% compared to USD 1,679.95 million in 2023. However, the Company’s strategy to maintain efficiency and optimize performance effectively reduced the cost of revenue by 22.83%, from USD 1,542.65 million in 2023 to USD 1,190.39 million in 2024. As a result, the Company achieved a significant increase in profit for the year, rising by 235.06% from USD 26.90 million in 2023 to USD 90.13 million in 2024 with net profit attributable to owners of the parent also skyrocketing by 517.8% from USD 10.92 million in 2023 to USD 67.48 million in 2024.
 
On December 11, 2024, the Company has completed the conversion of its mandatory convertible bonds (OWK BUMI) by issuing 13,255,515 shares. This conversion aims to reduce debt burden and improve the soundness of the Company’s capital structure. On the other hand, PT Pemeringkat Efek Indonesia (Pefindo) has assigned the Company an idA+ credit rating with a stable outlook. This rating reflects the Company’s strong business position, as well as its sufficient mining reserves and resources.
 
TARGET VERSUS ACHIEVEMENT
In general, the Company is close to achieving its production target by 2024. The realized coal production was 74.7 MT, relatively in line with the targeted range of 75–80 MT. KPC contributed 55 MT, meeting its target range of 52–55 MT, while Arutmin recorded 19.7 MT, approaching its target range of 23–25 MT.
 
CHALLENGES AND MITIGATIONS
We identified several pressure points and challenges that have impacted the Company’s overall performance and profitability, including royalties, government profit[1]sharing, and price subsidies related to the Domestic Market Obligation (DMO), which collectively impacted the Company’s gross revenue. In addition, rising fuel prices also affected the Company’s margins. The decline in revenue was further influenced by market conditions and weakening coal prices. Despite the operational pressures stemming from both production levels and selling prices, cost-efficiency efforts enabled BUMI to record a significant surge in net profit.
 
BUSINESS PROSPECTS
To ensure the Company’s long-term performance and compliance with the government of the Republic of Indonesia’s recommendations, the Company will continue to explore opportunities for downstream projects in collaboration with the right strategic partners. In this regard, the Company explores the feasibility of converting coal gasification into chemical products and diversifying beyond coal, particularly in other mineral sectors.
 
The government has approved the Company’s Work Plan and Budget (RKAB) for coal production. With this approval, the Company expects to produce 78 to 80 million tons of coal in 2025 and 2026. This total production target of 80 million tons will be met by two subsidiaries: KPC (55 million tons) and Arutmin (25 million tons). The calorific value (CV) of coal produced by KPC and Arutmin is expected to remain relatively low, at approximately 5,000 gross as received (GAR) for KPC and 4,400 GAR for Arutmin.
 
The Company will continue to maintain a low stripping ratio, reduce fuel consumption, and shorten the hauling distance for overburden removal (OB). With increasingly productive and efficient operational performance, the Company expects even higher revenue in 2025.
 
In addition, one of the Company’s subsidiaries, PT Bumi Resources Minerals (BRMS), is projected to have a promising business outlook in line with rising global gold prices. This projection provides a positive sentiment for BRMS, which is currently on an expansion path in its gold production. One of BRMS’s key projects is the development of an underground mining infrastructure in Poboya, Palu, which is expected to begin operations in 2027, with an average gold grade well above 3.5 g/t.
 
STRENGTHENING THE IMPLEMENTATION OF CORPORATE GOVERNANCE
Governance is one of the key pillars of Environmental, Social, and Governance (ESG) aspects. It reflects the vital role of governance implementation in supporting long[1]term business sustainability. With the growing emphasis on environmental, social, and governance-related issues, the Company has increasingly focused on strengthening governance practices to achieve balanced and sustainable performance.
 
As a mining company, the Company is firmly committed to conducting its business operations in a transparent and responsible manner. The Company ensures strict compliance with environmental regulations, manages the environmental impact of its operations appropriately, and is committed to implementing Good Mining Practices (GMP) in accordance with applicable standards and regulations.
 
By consistently adopting the core principles of Good Corporate Governance (GCG) and the pillars of corporate governance, the Company continues to enhance the quality of its risk management, internal control systems, and the continuous improvement of various guidelines and policies aimed at reinforcing effective governance practices. For us, professionalism and integrity must always be upheld to protect the Company’s reputation. We are therefore proud to report that no violations or legal cases involving members of management or employees have been identified or reported, including incidents related to corruption, gratification, bribery, or other misconduct that could damage BUMI’s reputation.
 
CHANGE IN BOARD OF DIRECTORS COMPOSITION
Effective per November 26, 2024, Mr. Jian Wang ended his term of office as a Director of the Company. The entire Board of Directors would like to thank for his dedication and contribution to the Company during his tenure.
 
We express our deepest condolences for the passing of Mr. Dileep Srivastava, who served as Director and Corporate Secretary of BUMI on February 8, 2025. He was a highly dedicated figure who continuously made impactful contributions to the Company’s development. His passing was a great loss to all of us. We extend our utmost gratitude for his unwavering service and dedication to the Company. May his soul rest in peace and be granted the best place by His side.
 
With the passing of Mr. Dileep Srivastava and the expiration of Mr. Jian Wang’s term of office, the composition of the Board of Directors has been directly affected.
 
APPRECIATION
The Company’s success in achieving improved performance this year signifies its ability to manage the business efficiently and effectively. We extend our sincere gratitude for the strong support from our shareholders, the valuable guidance from the Board of Commissioners, and the hard work and dedication of every employee. We remain committed to leading BUMI with strength and synergy and supporting the Company in delivering positive and long[1]term impact.
 
On Behalf of the Board of Directors,
 
Adika Nuraga Bakrie
President Director